Supplying employees with P60s is an annual job that shouldn’t take up too much of your time. But what is a P60 document? And what happens if you miss the P60 deadline? Plus how can you claim a P60 tax refund?
What is a P60 statement? This simple guide explores the P60 meaning for employers, business owners, and employees in the UK.
What is a P60?
Your employee’s P60 summarises their total pay and deductions for the tax year (6 April to 5 April the following year).
It’s an official document which clearly states pay (from their current and any previous jobs during the tax year), total tax deducted through PAYE, National Insurance contributions, and any student loan or statutory payments like maternity pay.
How to get a P60
The process for issuing P60s will depend on how you manage your payroll. If you have an accountant, they’ll normally send out P60s to employees for you. If you manage your own payroll, you can issue them in digital or paper format.
The easiest way to order P60s is in digital format. You can email them directly to employees, but must make them password-protected. To do this, you’ll need to use some sort of payroll software. If you have fewer than ten employees, you can use the basic PAYE tools offered by HMRC. Larger businesses will need to use more sophisticated payroll software. If you need paper copies, you can order P60s directly from HMRC – but bear in mind that these will take at least seven days to arrive.
Do you need to include a P60 on your tax return?
If you’re self-employed and not part of a PAYE scheme, you won’t receive a P60 and you won’t need to include it in your tax return.
However, if you receive a P60 from an employer but still need to file a Self Assessment for other work, then you can include it.
For example, if you run a clothing business from home but also work in a local coffee shop, you’ll need to complete a Self Assessment for your clothing business. You’ll also receive a P60 from the coffee shop as a record of your income and tax deductions from that job.
Read our guide to second job tax for a more detailed overview.
It’s important to note that if you’re employed by several companies during the same tax year, you should receive a separate P60 from all of them.
What does tax deducted mean on a P60?
Every P60 statement will have a section for ‘total tax deducted’. This is the amount of tax taken by the employer during the tax year the P60 is being issued for.
For example, if an employee earns £34,000 in a year from an employer and pays £4,750 in tax, their ‘total tax deducted’ figure for that tax year would be £4,750.
What does a P60 look like?
A P60 statement will include the following information about you or your employees:
- National Insurance number
- employee and employer details
- any statutory maternity, paternity, shared parental, or adoption pay
- total amount of student loan deductions made during the tax year
- employer’s PAYE reference
- annual total pay, tax deducted, and final tax code
If you’ve lost your P60 document, ask your employer to send you a replacement.If this isn’t possible, sign in to your personal tax account or contact HMRC to find out the information that was on your P60.
How to claim tax back with a P60
It’s good practice to check the figures on P60s because if they’re wrong, you or your employees could be paying too much tax.
If this is the case, a P60 can be used to claim a tax refund. Here are some of the most common reasons for overpaying tax:
- starting a new job and being put on an emergency tax code
- having more than one job at the same time
- a change in circumstances, such as switching from full-time to part-time work
How to check if you overpaid tax
You claim a refund from HMRC after the end of the tax year in which you overpaid. To do this, you can check your tax overpayment status and learn how to claim a refund by:
- accessing the HMRC refund claims process
- providing all your details – including National Insurance number, employer reference number, P45, and P60
- entering how much you earned, how much tax you paid and how much you think you overpaid
Taxpayers have four years from the end of the tax year in which they overpaid to claim a refund. For example, anyone requesting a refund for overpayment in the 2021/22 tax year will have until 5 April 2026 to submit their claim.
When might you receive a P60 tax refund? A real-life example
When you hire a new member of staff, it’s important that you provide HMRC with enough details about their salary. If you don’t, the employee could be put on an emergency tax code and end up overpaying tax.
For example, if the employee is given a ‘BR’ tax code, they won’t receive the tax-free personal allowance of £12,570. As a result, they’ll end up paying a basic tax rate of 20 per cent on all their earnings and overpaying their annual tax bill by more than £2,500.
When this happens, they’ll need to get in touch with HMRC to claim back the tax they’ve overpaid.
P60 deadline fines: what to expect and how to avoid them
If you’ve missed the P60 deadline, make sure you give your employees their P60s as soon as possible. The longer the delay, the more likely you are to get a fine.
HMRC do have the right to charge initial penalties of around £300 for late issuing, plus around £60 every day after that, until you issue the P60.
However, this depends on reporting and enforcement. If it’s a genuine error and you take steps to issue the P60 as soon as possible, you’re less likely to get a fine.
All about the P60 statement
Employers are legally required to issue their employees with P60 documents every year. It’s also important that you understand what’s included on these P60 documents in case your employees have queries about their tax codes or payments.
When are P60s issued and when should I get my P60?
P60s are issued by employers once a year. Employees need to receive their P60 every year by 31 May, and it can be paper or electronic. It will show pay from any jobs they were in during that tax year – as well as the total tax, National Insurance, and student loan payments deducted. A P60 can be used to prove their income, for example when applying for loans, and to check whether they’ve paid the right amount of tax.
Do my employees need a P60?
All employees on your payroll who were working for you on the last day of the tax year (5 April) will need a P60.
When do you get a P60 if you’re self-employed?
If you run a limited company and draw a salary, you’ll need to issue yourself a P60.
Sole traders, however, don’t draw salaries, so won’t need a P60.Find out more about self-employment tax with our guide on income tax rates.
How can I change a P60?
Made a mistake? If you need to issue a new P60 document, HMRC says you should clearly label the new P60 statement a ‘replacement’, or give your employee a letter confirming the change.
What’s the difference between P45 and P60?
The P45 and the P60 are the two most common PAYE forms. You’ll need to give your employee a P45 when they stop working for you so they can give their new employer the correct tax code information. As we’ve mentioned, employees need a P60 at the end of every tax year to summarise the amount of tax they’ve paid, as well as other contributions.
Do you get a tax refund on a P60?
A P60 can be used to claim a tax refund when an employee has paid too much tax – perhaps because they were on an emergency tax code or because they changed jobs.
P60 help and support
P60s are usually easy to sort out, once you have the right tools and guidance. Bookmark these HMRC pages to get you started:
This article is intended as a guide. You should speak to a professional accountant or financial advisor if you’re not sure about anything.
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